"When clients audit our billing process, we need to be able to say that it is up to snuff and accurate," says Kathy. "Now when they audit us to see that everything is being handled according to their contracts, we're very comfortable with it." The clients' financial people work directly with the accounting staff at Hudgins Humphrey Moore, Kathy explains, and it's working well. "They speak the same lingo and wear the same suit," she says. Clients & Profits made it happen by being the core of the new management system. "It's a great package that allows agencies to do their great work while the other stuff is being taken care of."

Defining the process

Getting started wasn't particularly easy, but for not the usual reasons. After selecting Clients & Profits, Hudgins Humphrey Moore had to not only learn the software, but the advertising business as well. The double learning curve was a challenge, to say the least.

The what and why of job costing, billing, and accounting in the advertising world is specialized and often a little surprising to an accountant with traditional clients. "The learning curve, as with any software, was pretty steep at first, but with my background in accounting that was the easy part," Rick says. "Learning the ad industry was the tough part, especially media."

Before joining Hudgins Humphrey Moore to run the project, Rick was the CFO for an internet service provider and familiar with many accounting software packages. But he had never worked for an ad agency. Rick and his staff learned how to use every aspect of Clients & Profits, including its production and traffic management side. Only by understanding how the entire system worked could the firm have the background it needed to correctly set up McCormick's C&P database.

Multiple offices, unique needs

In Clients & Profits, each of McCormick's four offices (located in Amarillo, Des Moines, Fort Worth, and Kansas City) is set up as a profit center. Each location has a unique set of task codes and general ledger accounts to distribute and track income, costs, and expenses accurately. "We have task codes for each location to get proper roll-up and financial tracking," Rick says. Setting up unique production/estimating/billing tasks for each office (even if the task is the same) allows costs and revenues to be tracked back to each office and each task. The result is strikingly accurate profitability statements for each office, as well as the company as a whole.

"We are 100% of McCormick's back office accounting department," Rick says. Hudgins Humphrey Moore handles billing, creating and running WIP reports for the account executives to review and approve, payables, receivables, and a myriad of other everyday chores, including human resources. Even though they handle the day-to-day back office tasks, Hudgins Humphrey Moore also takes a more strategic role. "We think of ourselves as their business partner," Rick says. "We help them with strategic decision-making, advise on tax matters, and earmark performance and other trends that we see evidenced in the financial statements." With that information readily available, McCormick's principals have an accurate, big-picture view of their agency and the industry, which helps them make strategic plans for future success.

As with every new process, there were ups and downs. McCormick Company hired a Clients & Profits trainer to train their staff, and they adapted to the new system pretty easily. "There have been a few glitches and frantic phone calls," Kathy says, "but we knew that with any new software, there's a learning curve."